NEW YORK -- Stocks had another turnaround Thursday and rocketed higher after China reassured investors it doesn't plan to sell the European debt it holds.
The Dow Jones industrial average surged nearly 285 points. Treasury prices tumbled as traders funneled money into riskier assets like stocks and commodities.
China's show of confidence in Europe let the market resume a rally that stalled late Wednesday following a report that the Chinese government was considering cutting its European debt holdings. If that were true, such a move would have signaled that China didn't think Europe would be able to contain the crisis. The agency that manages China's $2.5 trillion in foreign reserves denied the report.
Analysts also said some bounce has been expected after the slide that drove the Dow down 11 percent from its 2010 peak a month ago. Traders cautioned that this might not be a rally but merely a break in selling.
The steep gains Thursday were welcome after the Dow dropped eight of the prior 10 days. Twice this week, stocks have climbed for much of the day only to see the advances erased in late slides.
Yu-Dee Chang, principal at ACE Investment Strategists in McLean, Va., said investors know that the problems in Europe will take time to resolve. Chang said the uncertainty about whether the U.S. economy will continue to rebound is leading many traders to make short-term bets on stocks. That is adding to the market's swings.
"I'm willing to buy at certain times on dips, but any time I get a nice profit after a certain stretch, I'm going to take my profit," Chang said. He expects that the market will remain volatile for a time.
The Dow rose 284.54, or 2.9 percent, to 10,258.99, above 10,000, a psychological benchmark. Britain's FTSE 100 and Germany's DAX index each rose 3.1 percent, while France's CAC-40 climbed 3.4 percent. Japan's Nikkei stock average rose 1.2 percent.
